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Comparison study on NBFC SIDVIN SCHOOL OF BUSINESS & INSTITUTE OF TECHNOLOGY BANGALORE
Under the guidance and supervision of Report Guide: Prof. K. Ashok Anand [Faculty]
Company names
1. Housing Development Finance Corporation Limited 2. Sundaram Finance Limited. 3. Birla Global Finance Limited. 4. VLS Finance Limited. 5. LIC Housing Finance Limited.
The study in tented to find out the comparisons of financial data of following company. (1) Housing Development Finance Corporation Limited (2) Sundaram Finance Limited (3)Birla Global Finance Limited. (4) VLS Finance Limited. (5) LIC Housing Finance Limited.
About NBFC
Non banking Finance Company (NBFC)
It means (1) a financial institution that is a company, (2) a non-banking institution that is a company whose principal business is the receive of deposits under any scheme /arrangement /in any other manner or lending in any manner and (3) such other non-banking institution/class of institution as the RBI may specify, with the prior approval of the Government and by notification in the official gazette. The NBFCs are classified in to five categories. 1. Equipment Leasing Company (ELC) 2. Hire- Purchase Finance Company (HPFC) 3. Investment Company (IC) 4. Loan Company (LC) 5. Mutual Benefit Company (MBC)/ Mutual Benefit Finance Company (MBFC) There are different types of institutions involved in financial services. These include commercial banks, development financial institutions (DFIs) and nonbanking finance companies (NBFCs). Unlike DFIs e.g. ADBP and PICIC, that have a specified objective at priority besides efficient business conduct, NBFCs are formed purely with the commercial objectives. NBFCs provide range of financial services to their clients. Types of services that fall under the domain of non-banking finance services include the following; 1. Investment Finance Services 2. Investment Advisory Services 3. Asset Management Services 3
Any other form of business activities which the Federal Government may, by notification in the official gazette, specify from time to time.
Ministry of Finance, Department of Economic Affairs is the administrative Ministry in respect of foreign investment proposals in the non-banking finance sector. Foreign equity investments in NBFCs are permitted in 17 categories of NBFC activities so far approved for foreign equity investments such as merchant banking, stock broking, venture capital, housing finance, forex broking, leasing and finance, financial consultancy etc. Guidelines for foreign investment in NBFC sector have been amended so as to provide for a minimum capitalization norm of US $ 0.5 million, for the activities which are not fund based and only advisory or consultancy in nature, irrespective of the foreign equity participation level. This provision would be applicable to Investment Advisory Services, Financial Consultancy, Credit Reference Agencies, Credit Rating Agencies, Forex Broking and Money Changing Business. It has also been decided that the foreign held companies which had FIPB approval for undertaking specific activities on their own prior to issue of NBFC guidelines, and which through restructuring dilute their holdings through JVs with domestic participation in downstream subsidiaries, may be allowed to undertake such "specific activities" confined to rendering of support and facilities to only its downstream subsidiaries /JVs on an 'arms length basis' with the option of charging fees for the same. The study intended to comparison of financial data of following company.
Performance of the Company, during last Five years. Amount in local Currency (Rs. In Crores) Particulars Mar 06 Operating Income Other Income Total Income Interest & Financial Charges Operating & Administrative Expenses Less: Preoperative Expenditure Capitalized Profit before Depreciation & Tax Depreciation Profit Before Tax Tax Profit After Tax Adjustment below net profit P & L Balance brought forward Appropriations P & L Balance carried down Equity Dividend Preference Dividend Corporate Dividend Tax Equity Dividend (%) Earning Per Share (Rs.) Book Value Extraordinary Items Mar 05 4,208.37 76.50 4,284.87 2,497.52 211.36 0.00 1,575.99 18.69 1,557.30 300.00 1,257.30 0.00 0.00 1,257.30 0.00 499.13 0.00 70.00 200.00 47.58 179.05 46.30 Mar 04 3,332.46 82.12 3,414.58 1,962.00 177.11 0.00 1,275.47 18.69 1,256.78 220.20 1,036.58 0.00 0.00 1,036.58 0.00 423.50 0.00 60.25 170.00 39.19 155.87 56.20 Mar 03 3,068.93 9.68 3,078.61 1,874.36 153.69 0.00 1,050.56 23.58 1,026.98 175.20 851.78 0.00 0.00 851.78 0.00 332.93 0.00 42.66 135.00 32.81 137.62 0.00 Mar 02 2,967.32 8.30 2,975.62 1,969.80 129.09 0.00 876.73 25.70 851.03 160.74 690.29 0.00 0.00 690.29 0.00 268.85 0.00 34.45 110.00 26.83 124.54 0.00
2,692.42 7.74 2,700.16 1,871.24 106.16 0.00 722.76 31.83 690.93 110.92 580.01 0.00 0.00 580.01 0.00 304.28 0.00 0.00 250.00 47.66 222.07 0.00
Deposits Car Finance Commercial Vehicle Finance Equipment Finance Fleet Card Tyre Finance Today, the activities of the group span savings products like Deposits and Mutual Funds, Car and Commercial Vehicle Finance, Insurance, Home Loans, Software Solutions, Business Process Outsourcing, Tyre Finance, Fleet Cards and In freight . Sundaram Home Finance
Limited was incorporated on July 2, 1999, under the Companies Act 1956.
Performance of the Company, during last Five years. Amount in local Currency (in Cr) Particulars Mar 06 Mar Mar Mar Mar 05 04 03 02 Operating Income 603.04 499.16 394.09 464.72 468.93 Other Income 31.23 38.97 23.90 12.68 3.84 Total Income 634.27 538.13 417.99 477.40 472.77 Interest & Financial Charges 261.94 214.84 157.41 190.33 195.24 Operating & Administrative Expenses 114.87 119.13 100.12 105.32 88.94 Less: Preoperative Expenditure 0.00 0.00 0.00 0.00 0.00 Capitalized Profit before Depreciation & Tax 257.46 204.16 160.46 181.75 188.59 Depreciation 48.66 81.78 77.59 114.48 128.91 Profit Before Tax 208.80 122.38 82.87 67.27 59.68 Tax 38.21 46.39 27.25 21.60 19.32 Profit After Tax 170.59 75.99 55.62 45.67 40.36 Adjustment below net profit 0.00 8.54 0.00 0.00 0.00 P & L Balance brought forward 27.99 26.59 33.55 41.07 72.21 Appropriations 169.79 83.13 62.58 53.19 71.50 P & L Balance carried down 28.79 27.99 26.59 33.55 41.07 Equity Dividend 37.49 21.87 16.80 18.00 14.40 Preference Dividend 0.00 0.00 0.00 0.00 0.00 Corporate Dividend Tax 5.26 3.06 2.15 2.31 0.00 Equity Dividend (%) 135.00 75.00 70.00 75.00 60.00 Earning Per Share (Rs.) 59.51 30.39 22.28 18.07 16.82
291.88 283.01 218.02 202.74 181.53 -0.44 -1.39 0.64 -1.80 -1.67
Vision Statement To be the first preference of our customers as a leading integrated provider of complete financial services through superior value creation and technology. Retail Finance Group distributes the personal and institutional loans of various institutions to meet requirements of Housing Loan, Car Loan, Commercial Vehicle Loan, Equipment Finance and Personal Loans. The services offered are: Home / Mortgage loan Loan for buying a new house, plot, self-construction, renovation and repair.* Balance Transfer transfer your existing loan and save lacs of rupees. You can also avail additional loans Loan Against Property (Residential, Commercial) No Income proof scheme (Specially designed for Self-Employed) No part pre-payment charges. Performance of the Company, during last Five years. Amount in local Currency (in Crores) Particulars Mar 06 Operating Income Other Income Total Income Interest & Financial Charges Operating & Administrative Expenses Less: Preoperative Expenditure Capitalized Profit before Depreciation & Tax Depreciation Profit Before Tax Tax Profit After Tax Adjustment below net profit P & L Balance brought forward Appropriations P & L Balance carried down Equity Dividend Preference Dividend Corporate Dividend Tax Equity Dividend (%) Mar 05 68.90 9.70 78.60 29.06 20.16 0.00 29.38 0.90 28.48 -2.49 30.97 15.43 6.83 10.64 11.73 3.22 0.00 0.45 12.50 Mar 04 54.81 3.09 57.90 30.23 20.59 0.00 7.08 1.24 5.84 2.72 3.12 0.00 3.14 -0.57 6.83 1.58 2.14 0.48 10.00 Mar 03 33.12 4.06 37.18 27.24 8.00 0.00 1.94 2.45 -0.51 -2.04 1.53 0.00 5.12 3.51 3.14 0.00 3.00 0.20 0.00 Mar 02 46.97 6.56 53.53 35.64 13.23 0.00 4.66 2.86 1.80 -1.13 2.93 -0.50 8.42 5.73 5.12 0.79 3.78 0.06 5.00
63.33 60.95 124.28 42.99 63.70 0.00 17.59 7.35 10.24 1.35 8.89 -0.08 10.69 11.08 8.42 2.36 4.37 0.70 15.00
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11.85 0.32 0.00 0.00 2.43 34.07 37.40 38.09 39.15 43.41 -0.15 0.00 -0.01 0.02 57.58
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VLS Group has in its fold, VLS Securities Ltd., a 100% subsidiary of VLS Finance Ltd. VLS Securities Ltd. is a leading financial consulting & advisory services provider in India. VLS gives its clients access to all the investment tools necessary to make decisions, under the guidance of expert consultants. VLS Securities is engaged in the business of Investment Banking and Stock Broking services. The company is a full-fledged Investment Banking firm, registered as a Category I MERCHANT BANKER with the Securities & Exchange Board of India. It has considerable expertise in providing financial advisory services to prestigious clientele including leading corporates, private sector enterprises, and banks.
Performance of the Company, during last Five years. Amount in local Currency (Rs In Crores) Particulars Operating Income Other Income Total Income Interest & Financial Charges Operating & Administrative Expenses Less: Preoperative Expenditure Capitalized Profit before Depreciation & Tax Depreciation Profit Before Tax Tax Profit After Tax Adjustment below net profit P & L Balance brought forward Appropriations P & L Balance carried down Equity Dividend Preference Dividend Mar 06 2,171.74 1.42 2,173.16 0.00 2,164.78 0.00 8.38 0.53 7.85 0.34 7.51 0.00 0.20 7.57 0.14 0.00 0.00 Mar 05 1,340.74 4.90 1,345.64 0.00 1,337.54 0.00 8.10 0.56 7.54 0.08 7.46 0.00 0.25 7.51 0.20 0.00 0.00 Mar 04 402.54 -2.25 400.29 0.95 398.65 0.00 0.69 0.58 0.11 -0.08 0.19 0.08 0.00 0.02 0.25 0.00 0.00 Mar 03 131.69 6.30 137.99 0.01 139.04 0.00 -1.06 2.31 -3.37 0.46 -3.83 -0.06 0.00 -3.89 0.00 0.00 0.00 Mar 02 413.16 -26.49 386.67 0.00 393.31 0.00 -6.64 1.17 -7.81 0.00 -7.81 0.04 0.00 -7.77 0.00 0.00 0.00 12
Corporate Dividend Tax Equity Dividend (%) Earning Per Share (Rs.) Book Value Extraordinary Items
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The Company possesses one of the industry's most extensive marketing network in India: 6 regional offices and 115 area offices backed by chain of camp offices nationwide, an offshore office in Dubai and Registered and Corporate Office at Mumbai. It has a team of 875 dedicated employees. In addition the company has appointed over 5500 Direct Sales Agents (DSAs) and Home Loan Agents (HLAs) to extend its marketing reach. 16 Back Offices spread across the country conduct the credit appraisal and administrative functions. The Company has set up a Representative Office in Dubai to cater to the NonResident Indians in the GLCC countries covering Bahrain, Dubai, Kuwait, Qatar and Saudi Arabia. Today the Company has a proud group of over 8, 00,000 prudent house owners who have enjoyed the Company's financial assistance. The Company has so far disbursed Rs.250 Billion (Rs.25000 Crores). The Company also lends to Corporate Bodies and Companies under different schemes for purchase / construction of office premises for their own use, construction of staff quarters and also for onward lending to meet the requirements of employees, and also to Builders and Developers for residential and commercial projects. Different products in home loans are Griha Prakash Griha Shoba Sampurna Griha Builders Corporate employees housing lian scheme.
Performance of the Company, during last Five years. Amount in local Currency (Rs. In Crores) Particulars Operating Income Other Income Total Income Interest & Financial Charges Operating & Administrative Expenses Less: Preoperative Expenditure Profit before Depreciation & Tax Depreciation Profit Before Tax Tax Profit After Tax Adjustment below net profit P & L Balance brought forward Appropriations Mar 06 1,272.44 17.85 1,290.29 859.43 164.65 0.00 266.21 4.47 261.74 53.17 208.57 0.00 13.94 215.36 Mar 05 1,058.32 11.74 1,070.06 682.08 180.37 0.00 207.61 3.30 204.31 60.59 143.72 0.00 34.01 163.79 Mar 04 1,012.43 41.80 1,054.23 637.80 225.48 0.00 190.95 2.71 188.24 20.77 167.47 0.00 29.80 163.26 Mar 03 1,031.91 24.06 1,055.97 684.18 139.46 0.00 232.33 1.66 230.67 51.70 178.97 0.00 23.83 173.00 Mar02 874.91 23.80 898.71 644.45 69.73 0.00 184.53 1.32 183.21 35.55 147.66 -0.11 20.81 144.53 14
P & L Balance carried down Equity Dividend Preference Dividend Corporate Dividend Tax Equity Dividend (%) Earning Per Share (Rs.) Book Value Extraordinary Items
Comparison of financial data Profit Before Tax Company Marchname 2006 HDFC 1,557.30 Sundaram 208.80 Fin ltd Birla Fin. 28.48 VLS Fin.ltd 7.85 LIC Fin. Ltd 261.74 March2005 1,256.78 122.38 5.84 7.54 204.31 March2004 1,026.98 82.87 -0.51 0.11 188.24 March2003 851.03 67.27 1.80 -3.37 230.67 March2002 690.93 59.68 10.24 -7.81 183.21
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C o m p a r is io n o f P B T
1 ,8 0 0 .0 0 1 ,6 0 0 .0 0 1 ,4 0 0 .0 0 1 ,2 0 0 .0 0 1 ,0 0 0 .0 0 8 0 0 .0 0 6 0 0 .0 0 4 0 0 .0 0 2 0 0 .0 0 0 .0 0 -2 0 0 . 0 0 2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 Year Profit HDFC S u n . F in . B ir la F in . V L S F in . L IC F in .
Profit After Tax Company Marchname 2006 HDFC 1,257.30 Sundaram 170.59 Fin ltd Birla Fin. 30.97 VLS Fin.ltd 7.51 LIC Fin. Ltd 208.57
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C omparision of PAT
1,400.00 1,200.00 1,000.00 800.00 Profit 600.00 400.00 200.00 0.00 2002 -200.00 Ye a r 2003 2004 2005 2006 HDFC S un Fin B irla Fin V LS Fin LIC Fin
Equity Dividend % Company Marchname 2006 HDFC 200.00 Sundaram 135.00 Fin ltd Birla Fin. 12.50 VLS Fin.ltd 0.00 LIC Fin. Ltd 60.00
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C o m p a ris io n o f E q u ity D iv id e n d
300 250 200 Profit 150 100 50 0 2002 2003 2004 Ye a r 2005 2006 HDFC S u n F in . B irla F in . V L S F in . L IC F in .
Earning Per Share Company Marchname 2006 HDFC 47.58 Sundaram 59.51 Fin ltd Birla Fin. 11.85 VLS Fin.ltd 1.88 LIC Fin. Ltd 23.70
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C o m p a r is io n o f E a r n in g P e r S h a r e
70 60 50 40 Profit 30 20 10 0 2002 2003 2004 2005 Ye a r 2006 HDFC S u n F in . B irla F in V L S F in L IC F in
Conclusion
Fi nally I want to conclude that, if we see the performance of five Non Banking Finance Company one by one, HDFC have good brand name in market, Sundaram Finance also doing good performance, every year profit is increases. VLS Company in 2002 having not good result, but company progress is Last year, LIC is also doing good profit year. Because it has good market share and also long history. Company well performed 24.56 is earns per share in 2006 as compare to other company. But sundaram finance have earning per share is highest. HDFC is highest dividend paid to shareholder. As per my knowledge HDFC is the best performer in the non banking sector as compared with other. 19
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